OUR VIEW: City's necessary moves pay off

Published: Sunday, April 21, 2013 at 6:01 a.m.

Last Modified: Friday, April 19, 2013 at 5:36 p.m.

Moves by the city of Gadsden to lower the amount it spends on personnel costs — it was approaching three-fourths of the annual budget — weren’t popular, but their necessity was reinforced in the city’s mid-year financial report released last week.

City revenues were down by 0.1 percent six months into the fiscal year. Finance Director Lisa Rosser called that “a very insignificant amount,” although that description might have been different if the city’s expenses hadn’t been 5.2 percent under budget for the period.

A key component of the good news on expenses is that personnel costs were 4.2 percent under budget for the period. The city’s retirement costs also declined, by 6 percent.

Rosser said the steps taken by the City Council over the last couple of years — increasing the share employees pay toward their retirement (while reducing the city’s contribution), offering voluntary buyouts to employees, dropping health insurance premium payments for retirees over 65 and reducing the payments for retirees under that age — were necessary to secure Gadsden’s future.

For the first time in three years, the city didn’t have to dip into reserve funds to balance its budget, and a study released earlier this year indicated the moves have shrunk the city’s long-term liability for retired employees’ benefits by more than $70 million.

That has left Gadsden in strong financial shape, as far as its credit rating and ability to attract favorable bond interest rates, which ties in with the other major point in the mid-year report.

Rosser said the city’s revenue base needs to grow, and we agree. We’ve repeatedly praised the prudent financial management by Mayor Sherman Guyton’s administration, which has kept Gadsden out of the predicament faced by other municipalities and counties during difficult economic times. It’s just difficult for a city to move forward when budget writers perpetually are scratching for every percentage point, or having to dip into savings, to avoid red ink.

If the revenue’s not going to come from taxes, it needs to come from projects with the potential of economic return.

The best way to attract those is from a position of strength. Gadsden has done the tough but necessary things to get there.

<p>Moves by the city of Gadsden to lower the amount it spends on personnel costs — it was approaching three-fourths of the annual budget — weren't popular, but their necessity was reinforced in the city's mid-year financial report released last week.</p><p>City revenues were down by 0.1 percent six months into the fiscal year. Finance Director Lisa Rosser called that “a very insignificant amount,” although that description might have been different if the city's expenses hadn't been 5.2 percent under budget for the period.</p><p>A key component of the good news on expenses is that personnel costs were 4.2 percent under budget for the period. The city's retirement costs also declined, by 6 percent.</p><p>Rosser said the steps taken by the City Council over the last couple of years — increasing the share employees pay toward their retirement (while reducing the city's contribution), offering voluntary buyouts to employees, dropping health insurance premium payments for retirees over 65 and reducing the payments for retirees under that age — were necessary to secure Gadsden's future.</p><p>For the first time in three years, the city didn't have to dip into reserve funds to balance its budget, and a study released earlier this year indicated the moves have shrunk the city's long-term liability for retired employees' benefits by more than $70 million.</p><p>That has left Gadsden in strong financial shape, as far as its credit rating and ability to attract favorable bond interest rates, which ties in with the other major point in the mid-year report.</p><p>Rosser said the city's revenue base needs to grow, and we agree. We've repeatedly praised the prudent financial management by Mayor Sherman Guyton's administration, which has kept Gadsden out of the predicament faced by other municipalities and counties during difficult economic times. It's just difficult for a city to move forward when budget writers perpetually are scratching for every percentage point, or having to dip into savings, to avoid red ink.</p><p>If the revenue's not going to come from taxes, it needs to come from projects with the potential of economic return.</p><p>The best way to attract those is from a position of strength. Gadsden has done the tough but necessary things to get there.</p>